Gold rose and the dollar hit a four-month high against the euro on Monday on safe-haven appeal as the death toll from the coronavirus outbreak passed that of the SARS epidemic two decades ago, but Wall Street rallied to record highs.
Worries about the coronavirus kept investors on edge, as the World Health Organization warned that the transmission of the deadly virus among people who have not visited China could be “the spark that becomes a bigger fire."
Deal talks and a rally in defensive sectors helped the broad pan-European STOXX 600 index close up 0.07%, while Wall Street rebounded on the outlook for earnings and the economy, spurring the Nasdaq and S&P 500 to record closing highs.
Weak economic data in the eurozone made the dollar relatively more attractive than the single currency, especially considering Friday’s US non-farm payrolls report showing an acceleration in job growth in January.
Data on Monday revealed Italian industrial output was much weaker than expected in December, another setback for the euro after data on Friday showed German industrial output suffered its biggest fall since recession-hit 2009.
A gauge of global equity markets rose, lifted by US stocks after Wall Street rebounded, while key indexes for London, Paris and Frankfurt declined, weighed down on concerns about the extent of the coronavirus.
MSCI’s gauge of stocks across the globe gained 0.24%, and emerging market stocks lost 0.46%. In Europe, automakers, among the most exposed to China, fell 0.8%.
On Wall Street, the Dow Jones Industrial Average rose 174.31 points, or 0.6%, to 29,276.82. The S&P 500 gained 24.38 points, or 0.73%, to 3,352.09 and the Nasdaq Composite jumped 107.88 points, or 1.13%, to 9,628.39.
Investors continued to monitor the advance of the virus, which had killed more than 900 people as of Sunday, mostly in China’s provincial capital of Wuhan, the epicenter of the outbreak.
The full economic impact of the virus is still unknown but is expected to exacerbate a slowdown in the Chinese economy. Electric carmaker Tesla Inc rose 3.1%, however, as its Shanghai factory returned to service.
Back home, the Competition Commission has approved Mahindra & Mahindra's acquisition of majority stake in a wholly-owned subsidiary of Ford Motor Co, which will create a joint venture in the country.
ONGC, Indian Oil Corporation and NTPC were the top three profitable PSUs in 2018-19, whereas BSNL, Air India and MTNL incurred highest losses for a third consecutive year, according to a survey tabled in Parliament on Monday.
Public sector lender Union Bank of India is expecting to recover and upgrade loans worth ₹3,000 crore in the March quarter, the bank’s chief executive officer (CEO) Rajkiran Rai G. said, taking its total recoveries in fiscal year 2020 to ₹8,000 crore.
Among currencies, the dollar index rose 0.17%, with the euro down 0.28% to $1.0912. The Japanese yen strengthened 0.03% versus the greenback at 109.75 per dollar.
The benchmark 10-year U.S. Treasury note rose 4/32 in price to yield 1.5628%.
Treasury debt, which serves as a safe-haven investment in times of geopolitical and economic volatility, has been in demand since the start of the year. The 10-year Treasury yield, which moves inversely to price, has fallen 17.8% since 31 December.
The yield on Germany’s benchmark 10-year bund fell to -0.443%, inching towards 3-1/2 month lows at -0.447% set last week.
Shares overnight in Asia mostly fell. Japan’s Nikkei was off 0.6%, South Korea’s KOSPI was 0.5% weaker while Australia’s benchmark index eased 0.14%. China’s indexes were the only ones in the black in Asia, with the blue-chip index adding 0.4% and Shanghai’s SSE Composite up 0.5%.
Oil prices dipped on weaker Chinese demand due to the coronavirus and as traders waited to see if Russia would join other producers in seeking further output cuts. Oil has dropped more than 20% from a peak in January after the spreading virus hit demand in the world’s largest oil importer and fueled concerns of excess supplies.
Brent crude slipped $1.20 to settle at $53.27 a barrel, while U.S. West Texas Intermediate fell 75 cents to settle down at $49.57 a barrel.
U.S. gold futures settled 0.4% higher at$1,579.50 an ounce.
(Reuters contributed to the story)